North Carolina tobacco farmers are having to wait a little longer than usual to receive their final payment from the Tobacco Transition Payment Program.
Since the tobacco buyout payments began in 2005, farmers have typically received their annual payment in mid-January. This year, however, the farmers won’t receive their first payment until later this month.
“Basically what’s going to happen, is sometime in February the farmers should receive approximately 95 percent of the payment that they would be normally receiving,” said Jay Boyette, commodity director for the N.C. Farm Bureau. “And in the fourth quarter of the year, they’re going to receive a final payment that makes up the final 5 percent.”
Boyette said the delay was caused by the uncertainty over whether the buyout would be subject to the across-the-board government cuts known as sequestration.
The Obama administration in November announced that the buyout trust fund would be subject to the cuts. But the administration reversed that decision in January after a number of officials, including most of North Carolina’s congressional delegation, protested the cuts.
Payments under the program are from about $10 billion assessed on tobacco product makers and importers. The payments were started under a 2004 law that ended Depression-era tobacco quotas and were to be made annually for 10 years. This year is the last year for the payments.
Many farmers have come to count on the annual payments to cover various expenses. Boyette said most farmers will end up experiencing about a month delay.
“It’s certainly not devastating, but it certainly impacts your cash flow and how you might make payments on things,” Boyette said.